Tag: Jefferies

Amazon advertising to benefit from CPG sales growth, Jefferies says

  • Amazon could see more consumer packaged goods companies buy ads on its site as sales of food, beverages, and everyday consumables continue to grow during COVID-19.
  • Jefferies estimates Amazon could add $12 billion in additional advertising revenue if the company’s able to capture just 1% of the total ad and trade spend by CPG companies.
  • As a result, Jefferies is raising its estimates for Amazon’s advertising revenue by 2% to $23.5 billion in 2021 and $49 billion in 2025.
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Amazon’s advertising business stands to gain potentially tens of billions of dollars in additional revenue because of its booming grocery and household sales amid COVID-19.

That’s according to the investment firm Jefferies, which estimates the growth in Amazon’s grocery and household sales could help it tap into an advertising market worth almost $1.2 trillion in the consumer packaged goods space. 

As more brands that

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Jefferies Dives Deep into Amazon’s Advertising Business

Amazon continues to thrive and benefit from the COVID-19 pandemic because of the high demand for groceries and essentials. Since the coronavirus outbreak, Amazon has seen strong financial results and an overall boost in sales and advertising.

Analysts at Jefferies reiterated their Buy rating on shares of Amazon on Wednesday, with a price target of $3,800. The analysts now value Amazon’s advertising business at $350B which is up from their previous value estimate of $300B for the segment.

The analysts are expecting increased Consumer Packaged Goods (CPG) spending to be a key long-term driver for Amazon’s advertising revenues, and raised their annual sales growth estimates by 2% in 2021 and beyond. Also, the analysts estimate a combined $1T CPG advertising opportunity for AMZN, consisting of $800 billion in trade spending, and 200 billion in advertising.

“According to our survey, 40%/60% of U.S. online shoppers purchased more groceries/essentials on AMZN during

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